Solana, Avalanche Tokens Slide as Bitcoin Traders Target Eye Support at $38K

Over half of the profits accumulated by short-term bitcoin holders have been wiped out, Bitfinex analysts said in a Tuesday note.

AccessTimeIconJan 23, 2024 at 9:30 a.m. UTC
Updated Mar 8, 2024 at 8:17 p.m. UTC

Major tokens continued to slide on Tuesday as institutional sales tied to recently launched exchange-traded funds (ETF) weighed down bitcoin (BTC) prices, leading to a more than 20% decline for some tokens in the past week.

Solana’s SOL fell 7%, while Avalanche’s AVAX dropped 9% in the past 24 hours, reversing gains from a meme coin-led revival for both ecosystems in December, which saw their token prices hit a yearly high at the time.

Some of the two networks’ most popular tokens fell even further: Solana’s leading meme token, BONK, dropped 10%, while JOE, the token of Avalanche-based decentralized exchange Trader Joe, fell 12%.

Dogecoin (DOGE) traded at 6 cents, completely retracing its entire weekend move to 9 cents driven by speculations of its adoption on social application X’s upcoming payments service.

CoinDesk 20, a liquid index that tracks the highest tokens by capitalization, fell 4%, indicative of average declines in the broader crypto market.

Among the handful of tokens in the green were FTX’s FTT, buoyed by revival hopes, and Uma Network’s UMA, which has been bought up by market influencers on X in the past week ahead of an upcoming product launch.

Meanwhile, analysts at crypto exchange Bitfinex said in a Tuesday note that the recent slump in bitcoin prices had wiped out gains for short-term investors – with the levels of realized losses increasing, adding to a market drop.

Bitcoin short-term holders are exiting at a loss. (CryptoQuant)
Bitcoin short-term holders are exiting at a loss. (CryptoQuant)

“Over half of the profits accumulated by short-term holders have been wiped out under $43,000. Many holders, especially those who acquired BTC less than a month ago, are now

exiting the market at a loss,” the analysts said. “Such a substantial decrease in average profits for short-term holders, who tend to react more acutely to short-term market fluctuations, can be a precursor to selling pressure or exit liquidity.”

“A considerable price correction even further down from current levels across the market would not be surprising,” Bitfinex added, mirroring sentiment from an increasing cohort of traders who expect bitcoin to fall as low as $38,000 in the coming weeks.

Edited by Parikshit Mishra.


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Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.